It's fashionable to heap great expectations on international summits like this week in Cannes. The reality is that, even as the G-20 has its benefits, no meeting is going to fix the world's problems.
Summit meetings like next week's G-20 in Cannes are something of a mixed bag for world leaders. Conventional wisdom holds that summits are politicians' cat nip--a chance to bask in their status and commiserate with peers. Of course there are also substantive policy matters on the docket, and the challenge of producing results worthy of all the fuss. As any presidential aide will attest, everyone involved in the process is thinking ahead to perceptions of the summit and asking themselves, "what do we want the headline to be?"
If the justification for these powerfests is to advertise diplomacy to ordinary people, this places an onus on President Obama and his colleagues. In a time of such widespread economic strain, we're bound to look at the summit pronouncements and wonder whether that's the best the world's most powerful men and women can do. Even so, it's important to judge this question by realistic standards for what agreements Obama and his colleagues can reach, or else it will only fuel cynicism.
The G-20 is basically a club of key economic players--collectively they account for over 80 percent of world GDP--and a channel for their combined efforts to maintain global economic growth and financial stability. The recent history and current debates within the group will sound familiar to anyone who has been following the domestic politics of America's own economic troubles.
At the height of the Great Recession, the leaders of G-20 nations not only injected government spending into their own economies and propped up troubled banks, they also set up global financial facilities with trillions of dollars to meet additional needs. After the sense of emergency faded, however, so did the sense of solidarity among the leaders. Just before the June 2010 Toronto summit, President Obama wrote to his counterparts that the recovery was too fragile for a hasty shift from stimulus spending to austerity. Despite this plea, the leaders of Germany, Britain, and Canada pushed through a highly ambitious set of deficit reduction commitments. Such deep splits over what ails the economy inevitably constrain G-20 leaders' options for further action -- just as in the US budget battle.
The signature issue: spend-and-borrow countries, like the US, need to spend less. Export-and-lend countries, like China, need to spend more.
Another complication for leaders headed to Cannes is that the most immediate economic danger -- the threat posed by Greek government debt to the Euro -- lies somewhat beyond the G-20 sphere. Protecting the Euro from potential Greek default is a matter for the Eurozone countries, as shown by the recent frenzy of negotiations. But regardless of whether the G-20 nations reinforce European measures with added steps in Cannes, the wider global group will deserve partial credit for any solution forged by Europe's leaders.